PPF assessment period
Dalriada is one of five specialist firms that are members of the Pension Protection Fund’s (PPF) Trustee and Support Services Panel.
Dalriada is one of five specialist firms that are members of the Pension Protection Fund’s (PPF) Trustee and Support Services Panel. The PPF created the Trustee and Support Services Panel to help streamline the process (known as a ‘PPF assessment period’) that a pension scheme goes through once an employer insolvency event has occurred, to establish whether or not its members will be eligible for PPF compensation. The PPF’s intention with regard to a Panel based approach is to achieve a consistently high standard of work to provide certainty for members of such pension schemes. Delivering a consistently high standard of work is at the heart of what we do for all our clients: our main duty as trustee being to look after the interests of members.
Following notification of the employer insolvency, the PPF will confirm whether the scheme is eligible for entry in to the PPF. Once confirmed and validated, a PPF assessment period commences. The start date of the PPF assessment period is triggered by the insolvency event and so will be backdated to the date of the employer insolvency. During assessment period, we work with our advisers and the PPF to confirm whether the scheme has sufficient assets to secure members’ benefits above PPF compensation levels on the open market via the purchase of annuities. If not, the scheme will be transferred to the PPF, which will then assume responsibility for running the scheme and paying compensation to members.
Until any such transfer in to the PPF, the scheme will remain in the PPF assessment period with the trustee from the Trustee and Support Services Panel ensuring the relevant tasks are undertaken over this period. A PPF assessment period typically runs for up to two years following the initial employer insolvency.
We have worked with the PPF since it was established in 2005 and transferred one of the very first pension scheme(s) to enter the PPF in 2006. Our team has extensive experience in this area having worked with over 200 pension schemes during an assessment period.
As noted above, our expertise also extends to pension schemes which, having entered a PPF assessment period, have sufficient assets to secure member benefits, over and above the level of compensation that the PPF would pay, with an insurance provider.
We are also utilise our experience to help schemes identify areas of risk and put in place appropriate contingency plans depending upon the strength of their employer.
Please get in touch if you would like to know more about contingency planning and how this might help your scheme.
About the PPF
The PPF was set up in April 2005 to protect members if their employer or former employer becomes insolvent and the scheme can no longer afford to pay their promised pension. The PPF’s purpose is to pay benefits to members of eligible schemes where there are insufficient assets to provides members with pension benefits at PPF Compensation levels. Compensation is a level of pension that the PPF provide to members and is payable from the start of the assessment period.
You can find out more about the PPF at https://www.pensionprotectionfund.org.uk.